05.01 - Lonesome Cottage Business Park Poposal

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• Interest Rate of 5% • Legal costs and normal closing costs to be paid by developer • Developer has first right of refusal on Lot 1, Block 2 with the exception of MnDOT, should that lot be needed for an alternative route to Highway 371 • If Developer exercises his first right of refusal on Lot 1, Block 2, the cost of the lot will be market value at time of acquisition • If Developer sells any of the four lots, the City has first right of refusal at the lot price paid by the developer • WAC and SAC will be paid by the developer—however if the City's rate study shows a reduction in the current WAC and SAC fees a refund will be given to the developer based on the difference of the existing rates and the new rates • Collateral of the City financing the loan will be based on a personal guarantee, a corporate guarantee, and the TIF assignment to the City • $102,600 in tax increment financing, on a pay-as-you-go basis • A deposit of$10,000 due upon conceptual agreement. If the deposit is inadequate, additional funds will be escrowed • The City to keep 10% of the tax increment for administrative purposes Council Members Oraskovich and Ryan - Recommendations THESE RECOMMENDATIONS WILL BE AVAILABLE, HOPEFULLY BY MONDAY City Council Action: If the Council approves of the proposed terms, a Council motion for conceptual agreement of the proposed terms for the purchase of the business park lots by Lonesome Cottage is required. If the Council chooses to proceed with the project, legal and financial consultants will prepare documents and conduct a full financial review to determine the appropriate terms and conditions of the project.